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Automated Clearing House (ACH)

credit and debit machine

As the nation’s largest national ACH operator, the Reserve Banks process electronic funds transfers between financial institutions.

The Automated Clearing House (ACH) is a nationwide system that processes batches of electronic funds transfers. It primarily handles pre-authorized recurring payments such as payroll, corporate payments to vendors, insurance premium payments, and utility payments.

The Federal Reserve System houses the larger of the two national ACH operations. It receives files of payments from originating institutions, edits and sorts the payments, delivers the payments to receiving institutions, and settles the payments by crediting and debiting the institutions’ accounts.

FedACH handles these transactions for the Reserve Banks. The Federal Reserve Bank of Atlanta and the Federal Reserve Bank of Minneapolis provide operational support for FedACH, while account executives at all 12 Reserve Banks provide customer support.

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